Lawmakers Seek Equal Treatment for Entire Airline Industry
ISLAMABAD: The Senate Standing Committee on Finance on Sunday opposed a proposal to grant sales tax exemptions on the import of aircraft and aviation parts exclusively to Pakistan International Airlines Company Limited (PIACL), urging the government to extend the relief to all airlines operating in the country.
The committee reviewed recommendations related to the Finance Bill 2026-27 and completed clause-by-clause consideration of amendments proposed to the Sales Tax Act and the Federal Excise Act.
During the meeting, committee chairman Senator Saleem Mandviwala strongly objected to limiting the exemption to PIACL. He argued that such a move would create discrimination within the aviation sector and place other airlines at a competitive disadvantage.
“This is discrimination and cannot be justified. The entire aviation industry should benefit from this relief,” he said. He also warned that restricting the exemption to a single airline could result in legal challenges from other carriers.
Consequently, the committee directed the Ministry of Finance, the Tax Policy Unit and the Federal Board of Revenue (FBR) to revise the proposal and include all eligible airlines in the exemption schedule under the Sales Tax Act.
Government Cites Privatization Process
Responding to the concerns, Finance Minister Muhammad Aurangzeb explained that the exemption was originally proposed to support PIACL’s privatization process and facilitate the acquisition of new aircraft.
However, he noted that extending the concession to all airlines would require approval from the International Monetary Fund (IMF). Despite this, the committee recommended broadening the framework to cover the wider aviation industry.
Additional Tax and Administrative Reforms Approved
Meanwhile, the committee approved several other proposals, including measures to digitize the FBR and implement a faceless Inland Revenue system. Members also reviewed security requirements for the upcoming Shanghai Cooperation Organisation (SCO) summit, including the need for bulletproof vehicles.
Additionally, lawmakers approved expanding the Third Schedule of the Sales Tax Act and endorsed amendments allowing the e-auction of seized goods under a revised regulatory framework.
